Apple’s Lala purchase appears to have been “insurance”

Apple has reportedly "clarified" its plans for the cloud to music industry …

Apple isn't planning to replace its traditional music download model with a streaming model anytime soon—or at least that's what the company has reportedly been telling the music labels. Several unnamed music industry executives told the Financial Times that Apple has "clarified" its plans to use the cloud for music purposes, emphasizing that the company doesn't want to undermine its current dominant position in the music download market.

According to the execs speaking to FT, Apple likened its long-rumored plans to bring iTunes to the cloud as "insurance." Instead of cannibalizing its own wildly successful download service by introducing a streaming equivalent, Apple said it plans to make it possible for existing iTunes users to store their music remotely. This would enable them to access their libraries from various devices without having to sync via USB.

Incidentally, this model is exactly what streaming music service Lala began offering in 2007: a way for users to scan their hard drives for music and upload songs to a "digital locker" which then became available from any device the user had that could access his or her Lala account. Lala later began selling MP3s and eventually morphed into the streaming music service that we all remember before Apple bought the company in 2009.

Apple's recent comments to the music industry certainly jibe more with the iTunes Replay rumors than a Lala makeover. Allowing users to remotely access their regular downloads from any device would make just about everyone happy. And, as the Wall Street Journal reported earlier this month, it's possible that Apple plans to roll this service into a revamped version of MobileMe.

(That MobileMe makeover is expected to bring more than just streaming iTunes libraries, too—it's also rumored to combine its current e-mail, contacts, and calendar syncing with new social media services, making it a sort of Facebook, Foursquare, Ustream, and Ping mashup.)

Meanwhile, Google is also getting ready to launch a music service alongside Android 3.0 (Honeycomb), according to Motorola Mobility CEO Sanjay Jha. Jha said during last week's Mobile World Conference that a music service would soon become a part of Google's offerings. Like Apple, Google has long been rumored to be working on a streaming music service. But—again, like Apple—more recent rumors have pegged Google as preparing a combination of digital track downloads plus a digital locker streaming service.

Both Apple and Google are expected to introduce their respective music services sooner than later—some hope that Apple will discuss the service during its March 2 media event, but it's more likely that Apple will wait until later in the year to make such an announcement.

I never hear about Lala before Apple bought them, but if I got this right you paid them to stream your own music to your phone etc? Why would you do that? First of all you can probably fit days worth of music on the phone already, plus Pandora etc.

2nd: I took my old laptop, installed Ubuntu server (free) and subsonic (subsonic.org) ($10), use dynDNS to allow me to access it remotely (free) and with apps for iOS, Android, even Win-mo-fo 7 I can stream all my music, anywhere, for free!

Plus I also have nice home media/back up server. I've barely used linux before so if I can do it at least everyone else at Ars can (and should)!

The key question to me is: Does this"Apple said it plans to make it possible for existing iTunes users to store their music remotely."

include my music that wasn't purchased through iTunes (aka ripped from CD). And movies?

I was wondering the same exact thing. Does anyone know?

I suppose the quick answer is "No". How would Apple know whether or not your ripped tunes have been legitimately purchased by you and not pirated? Furthermore, by only allowing access to music purchased from iTunes they are promoting more sales via their online store.

Does this include my music that wasn't purchased through iTunes (aka ripped from CD). And movies?

Movies almost certainly no. iTunes-purchased music would be the priority. Other music, if it comes with the initial launch, would be limited to storage space available on your account, divided up between e-mail, iDisk, and iTunes.

I never hear about Lala before Apple bought them, but if I got this right you paid them to stream your own music to your phone etc? Why would you do that? First of all you can probably fit days worth of music on the phone already, plus Pandora etc.

2nd: I took my old laptop, installed Ubuntu server (free) and subsonic (subsonic.org) ($10), use dynDNS to allow me to access it remotely (free) and with apps for iOS, Android, even Win-mo-fo 7 I can stream all my music, anywhere, for free!

Plus I also have nice home media/back up server. I've barely used linux before so if I can do it at least everyone else at Ars can (and should)!

Sadly, you totally missed out on what was probably the most innovative music service in a long, long time. Lala hadn't actually rolled out a mobile app, but had publicly stated they were working on an iOS and Android app when they were purchased by Apple. They had taken suggestions for the apps via their website and were already accepting requests for beta users, so the apps were probably just around the corner.

1. What made Lala so great was that it didn't require a monthly subscription. Users could hear the song in its entirety once, then pay 10 cents to hear it as many times as they want on their site. I had purchased more 10-cent streaming songs in 3 months on Lala than I had downloaded from iTunes in 5 years.

2. It scrubbed your iTunes library and matched/uploaded songs to the cloud - even ones you didn't purchase from iTunes - so you could listen to your library anywhere you have an Internet connection for free!

3. It also had a social element where you can "follow" other users and listen to the music they do (exactly like Rdio does today). Even popular music sites had accounts you could follow: Pitchfork, Spin, XLR8R, etc. And since legit music sites usually get songs sent to them by the labels before the songs are for sale, you could hear them right in Lala. It was such a great way to discover new music.

I never hear about Lala before Apple bought them, but if I got this right you paid them to stream your own music to your phone etc? Why would you do that? First of all you can probably fit days worth of music on the phone already, plus Pandora etc.

2nd: I took my old laptop, installed Ubuntu server (free) and subsonic (subsonic.org) ($10), use dynDNS to allow me to access it remotely (free) and with apps for iOS, Android, even Win-mo-fo 7 I can stream all my music, anywhere, for free!

Plus I also have nice home media/back up server. I've barely used linux before so if I can do it at least everyone else at Ars can (and should)!

Sadly, you totally missed out on what was probably the most innovative music service in a long, long time. Lala hadn't actually rolled out a mobile app, but had publicly stated they were working on an iOS and Android app when they were purchased by Apple. They had taken suggestions for the apps via their website and were already accepting requests for beta users, so the apps were probably just around the corner.

1. What made Lala so great was that it didn't require a monthly subscription. Users could hear the song in its entirety once, then pay 10 cents to hear it as many times as they want on their site. I had purchased more 10-cent streaming songs in 3 months on Lala than I had downloaded from iTunes in 5 years.

2. It scrubbed your iTunes library and matched/uploaded songs to the cloud - even ones you didn't purchase from iTunes - so you could listen to your library anywhere you have an Internet connection for free!

3. It also had a social element where you can "follow" other users and listen to the music they do (exactly like Rdio does today). Even popular music sites had accounts you could follow: Pitchfork, Spin, XLR8R, etc. And since legit music sites usually get songs sent to them by the labels before the songs are for sale, you could hear them right in Lala. It was such a great way to discover new music.

I wonder if this is what they told DoJ anti-trust when they bought them?

They probably didn't have to tell them anything. Unlikely that deal would have fallen under the review thresholds.

Sherman Antitrust Act wrote:

In U.S. antitrust law, the Sherman Act addresses single-firm conduct by providing a remedy against "[e]very person who shall monopolize, or attempt to monopolize...any part of the trade or commerce among the several States."

Apple controls 70% of the online music market, and acquired a competitor that controlled a newly developed business model that was unique. They promptly shut this down. This is pretty transparently anti-competitive, and an attempt to strengthen their arguable monopoly or unarguable near-monopoly.

... and when MicroSoft did this, just to ensure their ongoing market dominance, there were anti-trust lawsuits from all over.

Instead, the urge to deify Apple within the journalistic community requires this acquisition be reported as mere "insurance" rather than an obviously greedy attempt to limit your choices. Apple wants you! (contained within their walled garden, that is).

"Apple" really is a good metaphor, come to think of it; the more consumers bite, the more freedom we'll all lose.

I wonder if this is what they told DoJ anti-trust when they bought them?

They probably didn't have to tell them anything. Unlikely that deal would have fallen under the review thresholds.

Sherman Antitrust Act wrote:

In U.S. antitrust law, the Sherman Act addresses single-firm conduct by providing a remedy against "[e]very person who shall monopolize, or attempt to monopolize...any part of the trade or commerce among the several States."

Apple controls 70% of the online music market, and acquired a competitor that controlled a newly developed business model that was unique. They promptly shut this down. This is pretty transparently anti-competitive, and an attempt to strengthen their arguable monopoly or unarguable near-monopoly.

So? That doesn't mean they have ever talked to a regulator about the acquisition.

I miss Lala too. I was actually a beta tester for that unreleased iphone/ipod app. It was pretty cool.

Lala did so many things:

1) It provided an engaging online community that allowed music fans to communicate with each other to explore and discover new music. Apple's Ping attempts to duplicate some of that functionality. (Poorly, in my view.)

2) It provided a very full featured CD trading service (I've never found anything better).

3) They sold CD's at great prices.

4) They provided a native app that scanned your music library and using meta-data attempted to match your music against their gigantic existing library. If they already had the song in their library, they didn't bother uploading it to your "web locker" they just put a pointer from their library to your locker. So 50,000 people all having the latest Lady Gaga hit in their libraries resulted in one copy of the actual song and 50,000 pointers to it. Smart and efficient.

If the native app couldn't match a track to the existing Lala Library, then they uploaded it. They uploaded MP3 and unDRM'ed AAC. They also imported playlists from iTunes.

Once in the cloud (Web Locker), you could use their web site to play any tune from your library on any web enabled device via their Flash based player. The iPhone app also talked to the central library and allowed you to play any tune in your library from your iDevice without Flash.

5) You could browse, buy and download Un DRM'ed MP3's of any of millions of tracks of music at prices that were often lower than iTunes or Amazon. (crap, I miss Lala...)

6) You could buy "Web only" versions of almost any song for a dime that were added to your "Web Locker" for playback as many times as you wanted but couldn't be downloaded to a PC or MP3 player.

As a previous commenter stated, one unique aspect of Lala was that you could play any track in its entirety once before buying it. (Full track preview). I found this great for exploring new music and for listening to comedy albums which I wouldn't listen to 50 times anyway.

I hope Apple is successful in using the Lala team's talent to bring iTunes and device syncing to the cloud and to build a similar community of passionate, engaged music lovers. I think they bought Lala to get that talent, not to shut them down.

Sadly, you totally missed out on what was probably the most innovative music service in a long, long time....

2. It scrubbed your iTunes library and matched/uploaded songs to the cloud - even ones you didn't purchase from iTunes - so you could listen to your library anywhere you have an Internet connection for free!

Not just iTunes, but just about any MP3 on your hard drive, so it was media device agnostic.

I really miss it, too. Since I knew it was too good to last, I didn't buy the 10 cent online-only songs, but coughed up the "full" 89 cents to get downloads, which I bought with confidence because I could hear the whole song.

I was looking forward to Airplay for one reason - I'd be able to surf and stream my iTunes library with my iPhone/iPad. They got the surfing down via the Remote app, but you can't stream to these devices without jailbreaking your iDevice. Could iTunes Replay be the reason they didn't enable this desirable feature?

So? That doesn't mean they have ever talked to a regulator about the acquisition.

The fact that what they are doing appears to run afoul of the law leads me to believe that they have.

LOL... you have no idea what you are talking about. Without automatic regulatory review, Apple would have said exactly nothing to the feds when they bought LaLa. And this transaction would not have triggered such a review. Whether they have subsequently had any discussions with regulators is both doubtful and outside of the scope of your original comment.

So? That doesn't mean they have ever talked to a regulator about the acquisition.

The fact that what they are doing appears to run afoul of the law leads me to believe that they have.

Wait, either they run afoul of the law and the acquisition is not permitted, or they are perfectly within their rights and no regulator cares. You can't have your cake and eat it too.

The fact that they acquired the company without problems or lawsuits leads me to believe that they were not running afoul of any laws, and thus may not have even been considered by the Department of Justice.

So? That doesn't mean they have ever talked to a regulator about the acquisition.

The fact that what they are doing appears to run afoul of the law leads me to believe that they have.

Wait, either they run afoul of the law and the acquisition is not permitted, or they are perfectly within their rights and no regulator cares. You can't have your cake and eat it too.

The fact that they acquired the company without problems or lawsuits leads me to believe that they were not running afoul of any laws, and thus may not have even been considered by the Department of Justice.

So? That doesn't mean they have ever talked to a regulator about the acquisition.

The fact that what they are doing appears to run afoul of the law leads me to believe that they have.

Wait, either they run afoul of the law and the acquisition is not permitted, or they are perfectly within their rights and no regulator cares. You can't have your cake and eat it too.

The fact that they acquired the company without problems or lawsuits leads me to believe that they were not running afoul of any laws, and thus may not have even been considered by the Department of Justice.

-dZ.

Oh, my mistake. Government is infallible and/or Corporations have no ability to use contributions to elected officials to influence the regulatory process. Thanks for clearing that up for me.

What's funny is that the premise of my original post was that Apple had deceived regulators when acquiring them (hey, we're interested in a new business model!) and then a year later (perhaps after the anti-trust restrictions had expired) they shut the company down. It *depended* on duplicity.

Also, I believe signatures are not permitted on the OpenForum.

Posting Guidelines wrote:

No signatures. Self-explanatory, we think. We try to keep a clean-looking forum, so take your signatures elsewhere. That goes double for signatures with commercial or blog links.